How To Withdraw PF Amount – Step-by-Step Guide

A government-backed savings program, the Provident Fund (PF) seeks to provide salaried employees with financial security after retirement or in the case of an emergency. Every month, the employee's salary is shared in a set proportion between the company and the employee, which accrues with time owing to interest.

Let's look at how PF withdrawal could be beneficial.

Ramesh, a 36-year-old marketing executive, had been paying contributions to his PF account for eight years.  When he was laid off owing to the company's downsizing, he needed immediate cash to cover his family's expenses, such as rent and medical bills.  With no upcoming job options, he decided to withdraw some of his PF savings.

 Here's how his PF details appeared:

Ramesh requested a ₹1,50,000 partial PF withdrawal under the unemployment clause. After applying through the EPFO web portal, the sum was credited to his account within 10 working days. This example demonstrates how PF savings can provide a valuable financial cushion during difficult times. In this blog, we will guide you through the eligibility, documentation, etc for a smooth PF withdrawal.

II. Types of PF Withdrawals

Complete Withdrawal (retirement or 2 months of unemployment)

Example: If Ramesh is unemployed for more than two months, he can withdraw his entire PF balance (₹4,90,000) rather than a portion amount.

Partial Withdrawal (for marriage, medical, education, home loan, etc.)

Allowed for particular purposes such as medical emergencies, house loans, and education. As Ramesh withdrew ₹1,50,000 under the unemployment clause.

Example: Ramesh can withdraw up to ₹1,20,000 for his child's education, which is 50% of his employee contribution of ₹2,40,000.

III. Documents Required

To withdraw your PF, you will need these documents. Here's what Ramesh filed for his ₹1,50,000 unemployment withdrawal:

Ramesh's Additional Docs:

• Layoff letter (unemployment proof)
• Sworn unemployment affidavit

Key Lesson from Ramesh:
 

His withdrawal was approved in 10 days because:

1. All documents were pre-linked to UAN
2. The online submission was error-free
3. PAN reduced his TDS to 10%

IV. Online Withdrawal Process (via EPFO Portal)

Here's how Ramesh withdrew ₹1.5 lakh in just 10 days through the EPFO portal:

Ramesh's timeline: 

Day 1: Applied online.

Day 3: Received permission SMS.

Day 7: Amount Credited

Why Was His Process Smooth?

• All KYC is pre-verified. 
• Employer attestation is not required for unemployment claims.
• Used net banking to get a fast OTP

V. Tax Implications

Understanding the tax rules helped Ramesh minimise deductions on his ₹1,50,000 withdrawal. Here's what you need to know:

1. TDS Rules on PF Withdrawal

Exception: There is no TDS if the withdrawal amount is less than ₹50,000 (even if less than 5 years).

2. How to Avoid TDS (When Applicable)

Ramesh didn't need these, but you might:

Example: If Ramesh had only 3 years of service, he would pay 10% TDS (₹15,000 on ₹1,50,000).

 Form 15G can be used to avoid TDS if the annual income is less than ₹2.50,000.

3. Ramesh's Tax Savings

• Withdrawals made throughout the eight-year tenure are tax-free.
• No Form 15G Needed: Only required for less than 5 years of service.
• Interest earnings of ₹65,000 were excluded from taxes.

Note: Early withdrawals (<5 years):

• TDS is deducted and adjusted against the final income tax liability.
• Claim a refund while filing ITR if the total income is below the taxable limit.

VI. Tips for a Smooth Withdrawal

• Always keep your details updated (KYC, bank information).
• Use the same phone number linked to Aadhaar/UAN.
• Track your application via the EPFO portal.

Conclusion

Ramesh's successful ₹150,000. PF withdrawal shows how strategic planning and digital technologies can make the process easier. His story demonstrates that with current records and wise digital decisions, PF withdrawals can be rapid and stress-free. Plan ahead, withdraw sensibly, and let your money grow safely!

Need help? LoansJagat will help you through every stage! 

FAQs

 Can I withdraw PF without employer approval?

Yes, in many instances, such as unemployment, medical emergencies, or marriage, if your KYC (Aadhaar, PAN, bank data) has previously been confirmed and connected to your UAN, you do not require employer consent. This is known as automatic claim processing.

Can I withdraw my PF several times?

Yes, partial withdrawals are permitted several times for various acceptable reasons (e.g., college, marriage, home loan), but each has its own limit and frequency.  For example, marriage-related withdrawal is only permitted once.

What if I can't remember my UAN?

To recover your UAN, go to the EPFO Member Portal and click "Know Your UAN".  You'll need your registered mobile number and PAN/Aadhaar.

Can I withdraw my PF from abroad if I have relocated permanently?

Yes. If you have relocated overseas and are no longer employed in India, you can withdraw your PF online using the EPFO portal as long as your UAN is active and KYC is complete.  Ensure that your Indian mobile number is active for OTP.

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